AUGUSTA — City councilors on Thursday took the first tentative steps toward a partnership they hope will end with a new use for the historic Cony flatiron building.

Though the council took no formal vote, they voiced enthusiastic, if not cautious, support for a proposal to convert the former high school on the east side traffic circle into senior housing and commercial space.

“I have great hope at what we can do here in this city,” said Cynthia Taylor, president of the non-profit housing developer Housing Initiatives of New England. “This not only fits into my business plan, but it’s my passion. I think this building has very strong bones.”

Councilors are expected to meet with Taylor in an executive session at a future date to work out the details of a proposal that would give Housing Initiatives exclusive development rights to the flatiron for the next four to eight months. Taylor said she needs the time to engineer the renovations and secure funding for what she estimated would be a $7 to $10 million project. Taylor estimated her company will spend $200,000 planning for the renovations during a protected development period.

City Manager William Bridgeo said there was little risk in giving Taylor exclusive development rights. She is the only developer willing to commit to the flatiron in the six years since Cony High School moved to its new building. The city has spent about $75,000 a year heating and maintaining the vacant building during that time as it failed in four separate attempts to woo developers for the building.

“We don’t have a lot of people banging on our door to develop the project,” Bridgeo said.

Taylor said it will take effort to secure funding for the project. There likely will be multiple sources for that funding. Bridgeo said that because the flatiron building is listed on the National Register of Historic Places it qualified for federal and state tax credits.

But, to qualify for those credits, Housing Initiatives may have to establish a for-profit subsidiary to operate the flatiron business. Bridgeo said such a move would make the company vulnerable to about $175,000 ar year in city property taxes that it would not have to pay if the apartment complex is run by the non-profit Housing Initiatives. If Housing Initiatives opts to start a for-profit business, it likely will seek a tax increment financing package from the city, Bridgeo said. The details, including the amount of that TIF, will not be known until Taylor has lined up the financial package for the building. With a TIF, a portion of what the project would have paid in property taxes is given back to the developer for a limited period of time.

“She may need a TIF to close the gap,” he said.

Taylor said just the cost of operating the building, divided by the number of units, will be greater than the revenue generated from the $1,000 per month rental fee.

Councilor-at-large Cecil Munson, who voiced support for Taylor’s proposal, said councilors will pay particular attention to any TIF proposal required for Taylor’s financing.

“It will be interesting how it all shakes out,” Munson said. “I think the devil will be in the details. I’d like to have a very clear picture of what we’re doing.”

The city’s relationship with Taylor dates back more than 14 years. Housing Initiatives successfully developed the old City Hall and converted it into a 31-unit assisted living home. The 116-year-old City Hall building underwent $5 million in renovations.

“I’m encouraged by your interest,” said Ward 4 Councilor Mark O’Brien. “Even more so by your track record.”

Taylor’s proposal includes buying the building for $25,000 or leasing it for 100 years at $1 per year, which is similar to the terms for the old City Hall. Taylor envisions a 32-unit building for seniors 55 and older who are still active. The apartments would likely rent for $1,000 per month.

There also will likely be limited commercial development, perhaps a coffee shop or physical therapy clinic, that would cater to residents and the community at large.

Taylor’s plans call for retaining the stage and auditorium in the center of the building. Bridgeo said any agreement would protect in writing the exterior of the building and certain items of particular historical significance, such as the clock and horse trough.

“What makes this project challenging for the city is the historic significance and preserving that,” Bridgeo said. “(Taylor) is aware of that as well.”

Taylor’s company recently converted the history Bessey School in Scarborough into a 54-unit apartment building for those 55 and older. She said there are funding opportunities for senior housing and, unlike other ventures, there is a market to fill those apartments once they are built.

“The demographics are fine for what I want to do with this building right now,” Taylor said.

She said the city’s cooperation with her company while developing the old City Hall gives her even greater confidence that her plans will prove successful.

“The community supported me and stood behind me,” Taylor said. “It’s a community I want to work in.”

Craig Crosby — 621-5642

[email protected]

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